Ikea had 83 million visitors last year. (Photo : Getty Images)
Ikea will be its ready-to-assemble furniture, appliances and home accessories but not perishables like food and green plants online. The initial run will start in Shanghai by the end of August.
An e-commerce business model was used by the company in Northern Europe and the United Kingdom. This is the first time that the same model will be used in the Asia Pacific region.
Experts believe that it's important for Ikea to build a presence in third to fourth level cities through e-commerce, especially in areas that a physical store is not established.
"The physical stores of Ikea are very big and require large areas. The stores in first- and second-tier cities are nearly saturated," said Lu Zhenwang, an internet expert and chief executive of Wanqing Consultancy in Shanghai.
He added, "There aren't any Ikea physical stores in third- and fourth-tier cities though the demand is emerging, so it's essential for Ikea to launch e-commerce services and to serve those places easily in the future. It would be convenient to set up some pickup and order points in smaller cities."
For the manufacturer be able to meet shipping demands to various points in China, they established a pick-up and order depot in Wenzhou, Zhejiang Province.
The company also said that their e-commerce model will enable them to establish more pick-up and drop-off points in smaller cities.
Meanwhile, Ikea just opened two stores in Jiangsu Province and one store in Guangdong Province.
The planned expansion to the online marketplace is seen to further increase sales. Ikea was able to earn 11.7 billion yuan or $1.76 billion. This is a 19.4 percent increase from 2015.
The physical stores received 83 million customers while online store had 67 million individual visits.
Ikea is targeting global sales of $55 billion by 2020.
